Posted: Jun. 6, 2009

Jeffrey Phelps

Susie Raymond, owner of White Sage Spa in Fox Point, gives Jane Kelley a facial at the spa.

 

Jeffrey Phelps

Susie Raymond, owner of White Sage Spa in Fox Point, gives Jane Kelley a facial at the spa.

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In an economy where 86% of women say they'd give up their pedicures, spa operators have their work cut out for them.

But they're getting some help from weather: sandal-and-bikini season has a way of turning a luxury into a necessity.

"We were affected in the earlier part of the year," said Patty Hanisch, owner of the Serenity day spa in Waukesha. "But once Easter hit, we're pretty much on course with last year."

Wisconsin operators of spas ranging from neighborhood locations like Serenity's to luxury spots in resorts say they've been affected to various degrees since the economy blew up last year.

When revenues started dropping, spa owners reacted by offering better values - more massage time for the money - and emphasizing health benefits in their pitches. Those strategies are helping, they say.

"The recession has played a big role in our industry because the consumer still sees spa services as a luxury," said Hannelore Leavy, founder and executive director of the Day Spa Association in New Jersey. Leavy said her national trade group has lost about a third of its members in the past year.

"Many day spas are struggling to stay alive," Leavy said.

Jean Kolb, director of wellness at Kohler Co., said the national picture is less bleak when you include spas located inside resorts. Kolb is chairman of the International Spa Association, a group that includes spas such as the Waters spa at the American Club at Kohler. The ISA estimates that there were 18,000 spas in the U.S. in 2008, and fewer than 1% of those have closed their doors.

"It was the newbies, the day spas," Kolb said.

Kohler operates two spas. In addition to the Waters spa in Kohler, the company opened a day spa a year ago in a shopping center in Burr Ridge, Ill.

"Our timing was impeccable," Kolb said of the 2008 debut in Illinois at a time when the economy was in decline. Even so, business there hasn't suffered as much as the company expected it would when the recession deepened.

Clients are still coming to the Kohler spas, but they are scheduling fewer treatments and less expensive treatments, she said. Corporate bookings are down at the American Club, and that is affecting the spa. But leisure guests continue to arrive by car from Milwaukee and the Chicago area, Kolb said.

Sundara, a luxury spa and hotel in Wisconsin Dells, has seen its spa revenues drop by 10% to 15% since last year, said Tara Duarte, director of guest services and marketing.

"We are pretty fortunate," Duarte said. "The industry average is down 20% to 40%. We feel good about where things are."

Massage and nail services are offered by almost all spas. But some, like Sundara, also offer hair services. Spas that include shampoos and cuts on their menus say that hair has remained a steady business for them, because regular customers won't give up hair care.

Before the recession, guests at Sundara booked an average of three to four spa services per visit. Now that's down to two to three services per guest, Duarte said.

Clear Waters salon in Williams Bay has seen very little downturn with the recession, said co-owner Dawn Marie Jacobs. The spa, at the west end of Lake Geneva, is the only full-service day spa in the area that isn't located inside a resort. It provides hair services and serves a well-heeled clientele.

Clear Waters has a physician on staff who does Botox treatments and facial peels, and it invited clients for wine and treats on a recent Saturday to celebrate the spa's fourth anniversary. The return of second-home owners around the lake this spring also has helped, Jacobs said.

White Sage Spa in Fox Point relies entirely on spa services for revenue because it doesn't have hair services to fall back on.

"Business has been a little tough, and now I feel like it's coming back," said owner Susie Raymond. Gift card sales declined at Christmas but rebounded for Mother's Day, Raymond said.

A survey conducted during the 2008 holiday season by BIGresearch for the National Retail Federation showed some of the reasons for that. When asked what they could live without, women put facials, manicures and pedicures near the top of the list. Nearly 90% said a facial was expendable; 86% were willing to forgo nail services.

Leavy, at the Day Spa Association, recommends that spas emphasize health for body and skin, rather than beauty, in their marketing messages. She also advises operators to find ways to offer more value without slashing rates, such as offering shorter lengths of service for a massage, for example.

Some have gone the other way. Raymond, at White Sage, has offered an extra 15 minutes on an hour massage, and she's added extras such as a brow wax or makeup touchup after a facial.

"It's a way of introducing a client to a different service that they haven't tried before," Raymond said.

Hanisch, at Serenity in Waukesha, has been putting together economical packages of services for clients, three 30-minute treatments for $89, for example.

"We've always done them, but never as much as we're doing now," she said. During the winter, Serenity therapists went door-to-door in the neighborhood, and out into the shopping center parking lot to put fliers on cars.

"Not everybody has lost a job. Ninety percent of the population is still working," Hanisch said. And some of her clients who are out of work are still coming in, she said.

She credits the warm weather for some of the recent upturn in business.

"Nails are still the busiest, but waxing is very popular," Hanisch said.